My Cash Ratio Went From 90% to 15% in 8 Years — Because I Stopped Tracking the Percentage

My cash ratio is 15%. I didn’t plan it that way

Last month I pulled up my brokerage account next to my bank account and did the math out of curiosity.

Cash ratio: 15%.

I actually said “wait, that low?” out loud. I knew I’d been shrinking it. I didn’t realize by how much.

Eight years ago, when I started investing, I was sitting at 90% cash. Going from 90% to 15% sounds dramatic on paper. What I actually did to get there is embarrassingly boring.

Eight years ago: ¥20M, 90% cash, and a target that looks quaint now

Back around 2018, my total net worth was roughly ¥20M (~$133K). About 90% of that — ¥18M — was just sitting in a bank account. Only around ¥2M was actually invested.

The goal I set for myself at the time was simple: get cash down to 40% of the total.

Honestly, 40% already felt aggressive to me back then. I don’t fully remember where that number came from — maybe a book, maybe my own back-of-envelope math. It wasn’t rigorous. It was closer to “this feels like it won’t kill me” than an actual plan.

For the next few years, progress was slow. A little extra into investments whenever I got a bonus. A ¥10K bump to my monthly contribution whenever my pay went up. That’s it.

Quick Japan Context

If you’re not familiar with NISA, here’s the short version: it’s Japan’s tax-free investment account, similar to a Roth IRA but with a much bigger annual cap (currently around ¥3.6M / ~$24K). When the newer, expanded version launched, it removed one of the last reasons I had for sitting on cash — money that used to earn nothing in a savings account could suddenly compound tax-free instead.

The thing I moved fast, then the thing I never moved at all

The pace changed hard once the new NISA program launched. I moved a chunk of money that had been sitting in a regular taxable account, plus some of my bank cash, into it all at once.

The logic was simple: if there’s a tax-free lane available and I’m not using it, sitting on cash stops making sense.

I’ll admit that transfer scared me a little. Eight years of slow, cautious pacing, compressed into a few months. But I didn’t hesitate for long, because somewhere along the way, that 40% target had quietly flipped in my head — from “the number I’m protecting” to “the number I want to get past.”

What I was actually protecting wasn’t a percentage. It was ¥5M

Which brings me back to that 15%.

I want to be honest: I didn’t sit down and decide to lower my cash ratio. My net worth grew from ¥20M to around ¥60M ($400K), and my cash amount barely moved. The percentage just… fell, on its own.

That’s when I noticed something I hadn’t expected. I’d set a percentage target, but the thing I’d actually been defending the whole time wasn’t a percentage. It was a dollar figure. Roughly ¥5M (~$33K). That number hasn’t dropped no matter how much the rest of my net worth has grown.

Do the math: ¥60M × 15% comes out to about ¥9M ($60K) in cash. My personal floor — “never go below ¥5M” — is cleared with room to spare. I sailed past my old 40% target a long time ago, and somewhere in there, the thing I was actually guarding switched from a ratio to a number.

Thinking about it more, I suspect most people do this the other way around — pick a ratio first, let the dollar amount follow. Mine went the opposite direction: I fixed the dollar amount and let the ratio drift wherever the market took it. Neither is more “correct.” This one was just easier for my brain to hold onto.

Why 12 months, not the textbook 3–6

That ¥5M figure comes from monthly expenses. My household runs on roughly ¥400K (~$2,670) a month, so ¥400K × 12 = ¥4.8M. Round up a bit, and you get ¥5M.

Most personal finance guidance says an emergency fund should cover 3–6 months of expenses. By that math, I’d only need ¥1.2M–¥2.4M ($8K–$16K).

I’m holding more than double the upper end of that range.

So why 12 months? Honestly — the reasoning came after the decision, not before. Three months felt too thin. Six months would probably be fine. But “fine” wasn’t the bar. I wanted 12 months because it felt right, full stop.

I was studying for a Japanese financial planning certification around that time, and the textbook stated the 3–6 month range flatly, no argument attached. Test-wise, that’s the correct answer. Applied to my own account, it just didn’t sit right. When the math and the gut disagree, I let the gut win. By strict math, I’m holding roughly ¥2M more than I “need.” I’ve decided to think of that extra ¥2M as an insurance premium for sleeping well.

Why a falling cash ratio doesn’t scare me

You might be reading this and thinking: doesn’t it scare you, watching that percentage keep dropping?

Honestly, no. My default has been “invest whatever I can” for years now, and that hasn’t changed.

The reason is simple. Worst case, I sell some index funds. That’s the backup plan.

Here’s the part that surprised even me, writing this. I haven’t sold a single index fund since 2018. Eight years, zero sales. And yet I genuinely believe I could sell if I had to. Where does that confidence come from, if I’ve never actually tested it?

I think I found the answer while thinking it through. Selling everything at once takes real nerve. Selling a small slice at a time doesn’t — the psychological bar is completely different. If I only sell what I need, even selling at a loss barely moves the needle. So it doesn’t feel scary.

Fear of a full liquidation and comfort with a partial one turned out to be two completely different things, even though they’re technically the same action: selling.

What changes if I actually FIRE

That said, I don’t think “¥5M, 12 months” is a permanent answer.

The ¥5M number assumes a paycheck is still landing every month. As long as my company keeps paying me, I’ll basically never need to touch the index funds.

If I actually FIRE and the paycheck disappears, the math changes. At that point, I’d want 24 months instead of 12 — something like ¥10M ($67K) in cash. Markets don’t announce how long a downturn will last. Some recover in a year. Some stay ugly for two or more. Riding out either one with zero income, on my current buffer, feels a little thin.

I think I’m underrating how much a monthly paycheck is worth right now — it’s basically cash appearing out of nowhere every month. As long as I’m employed, my emergency fund is an insurance policy I’ll probably never use. The moment the income stops, that same ¥5M turns from insurance into a lifeline.

I haven’t actually hit that moment yet. I also haven’t hit the moment where I’m relieved I had the buffer at all — which, if you think about it, is exactly what a good emergency fund is supposed to feel like: mostly invisible.

The ¥10M figure is a rough estimate, too, not a fixed rule. Once early retirement actually gets close instead of theoretical, I’ll probably run the numbers again with real dates attached, not a hypothetical “someday.” For now it’s just the number that lets me stop worrying about the question and get back to the spreadsheet I actually enjoy — the one where I contribute the same amount every month no matter what the market is doing.

Grading my own allocation: 100/100, for now

15% cash, roughly ¥9M ($60K). If I had to grade this allocation today, I’d give it a perfect score.

Not because it’s optimal on paper — I honestly don’t know if it is — but because I have zero hesitation in either direction. I haven’t sold a share of my invested money, and my cash cushion clears 12 months of expenses without stretching. There’s no regret sitting on either side of the ledger right now.

That grade is only good for today’s conditions, though. Lose the job, get sick, and the number changes. I’d probably be rebuilding this whole calculation from scratch. I’m fine with that. An emergency fund isn’t something you set once and forget — it’s something you recalculate every time your situation actually changes. Eight years in, that part finally clicked for me.

I thought I was chasing a ratio. Somewhere in eight years, without noticing, I switched to defending a number instead. That’s the real finding here — more than any specific percentage or dollar figure. This applies beyond Japan: whatever currency you’re saving in, the target that actually keeps you calm at 2am is rarely the one on the spreadsheet. It’s usually a number, not a percentage.

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This is a personal record, not investment or financial advice. Currency conversions use roughly $1 = ¥150 and are rough by design. Do your own homework before making decisions with your own money.